What is Liability Insurance

Liability insurance coverage helps pay for another person’s expenses in connection with an automobile accident.  Liability coverage falls into two buckets—bodily injury coverage and property damage coverage.  Currently, the minimum liability limits in Texas are $30,000 for each injured person up to a total of $60,000 per accident, and $25,000 for property damage per accident.

With rising healthcare and car costs, Texas’ minimum policy limits may not fully pay for the cost of an accident.  If you are found at fault for the accident, you could be on the hook for any excess costs not covered by your insurance policy.  Also, liability insurance by itself does not pay for the damage to your car—it only pays for the damage to other vehicles and people.

You and your family members may be covered by an insurance policy even when you are driving someone else’s car.  The important thing to remember is that you need to carefully review your policy and see what is and isn’t covered.  Otherwise, when the unfortunate happens, you may be up the creek without a paddle.

What Does Your Insurance Plan Not Cover?

That really depends on your plan.  Coverages can vary policy to policy.  We recommend that you read your policy very carefully.  That said, there are some common exclusions, which include:

  • Ride-Sharing – exclusions for using your car to work for Uber or Lyft
  • Excluded Driver – exclusions for people specifically named in the policy
  • Intentional Acts – exclusions for intentional losses
  • Racing – exclusions for using your care at a race

It is crucial that you carefully read your insurance policy to see what protections it provides.

What Claims are Covered by Liability Insurance?

First, in Texas, all drivers are required to have liability insurance—it is a basic requirement.  Liability coverage pays for (1) injuries to others, including their medical bills and pain and suffering, (2) damage to another vehicle, and (3) car rental costs for the other driver.  Additionally, in many cases, insurance carriers will usually hire and pay for an attorney to represent you.